NuStar Reports Record Earnings

February 4, 2016 Elizabeth Alford

Chesapeake Released 2015 Q1 — NuStar 2015 Financials

NuStar Energy, a pipeline operator in the Eagle Ford, announces the highest recorded EBITDA in the company's history for full year 2015.

In a recent press release, NuStar reported $662.7 million of EBITDA for the year ending December 31, 2015, a 21% increase over the same time last year.

In recent years, much of NuStar's growth has been around their assets in Eagle Ford. Following are the company's comments for the fourth quarter and full year 2015.

Total Eagle Ford volumes average about 238,000 barrels per day
Record Eagle Ford throughputs at our Corpus Christi North Beach terminal
Eagle Ford operations comprise less than 20% of our total 2015 segment EBITDA
Approximately 73% of our Eagle Ford revenues are committed under long-term take-or-pay contracts with strong creditworthy customers
Throughputs in the company's Eagle Ford assets were down 18% in the fourth quarter of 2015 compared to the record throughput levels we reached in the first quarter of the year
The company forecasts Eagle Ford throughput slightly above our minimum volume commitments for all of 2016

“Our 2016 capital spending projections remain unchanged. We have budgeted to spend $360 to $380 million for strategic capital and $35 to $45 million on reliability capital spending. The Eagle Ford portion of our business is a narrow slice of our operations and comprises less than 20% of our total 2015 segment EBITDA.”

In other NuStar news, the company partnered with ConocoPhilips to ship the first load of Eagle Ford sweet crude from Corpus Christi just two weeks after the Obama Administration repealed the 40-year oil export ban.

More Job Cuts for Texas

February 2, 2016 Elizabeth Alford

Chesapeake Cuts Budget for 2015 — More Texas Jobs Cuts

News of more Texas job cuts circulated around the news wires yesterday, adding to the strain of the current downturn.

The beginning of 2016 has been less than stellar as the situation in the oil and gas industry continues to deteriorate. Throughout January, crude prices fluctuated wildly dipping to below $30 at one point, while rig counts across the country dropped to 619 last week. Additionally,industry giants Halliburton and Schlumberger announced a new rash of layoffs last month that will cut 14,000 job cuts nationwide.

The news is Texas is not any better with the Texas Workforce Commission reporting new layoffs in the oil and gas industry that will total over 539 jobs.

The TWC is reporting the following job cuts since January 1st:

Maersk Drilling: 80 jobs in January
Noble Drilling: 120 jobs in March
Southwestern Energy Company: 376 jobs in March
Tenaris Corp.: 166 jobs in March
National Oilwell Varco: 129 jobs in May
Quicksilver Resources Inc: 164 jobs in April. The company filed for Chapter 11 bankruptcy in March of 2015 and plans to sell all of its assets while working to restructure its businesses.

After oil prices began their decent last year, it took a little time for the reality of the low oil prices to finally trickle down. But by October 2015, the industry lost an estimated 200,000 jobs with around 60,000 in Texas alone.

Murphy Oil to Spend $340 Million in Eagle Ford in 2016

February 1, 2016 Elizabeth Alford

Murphy Oil executives release 2015 numbers showing their Eagle Ford operations have remained resilient and exceed expectations.

In a press release last week, Murphy Oil announced a net loss of $587.1 million for 2015. The company's full year volumes were 200,753 boepd in the fourth quarter and 207,903 boepd for full-year 2015. Eagle Ford Highlights for 2015

The Eagle Ford Shale outperformed company expectations for 2015, with highlights including:

Q4 production averaged over 57,000 boepd with 27 operated wells brought online.
Full-year 2015 production averaged over 61,200 boepd with 136 operated wells brought online.
Eagle Ford Shale had a fourth quarter operating expense of just under $8.50 per BOE. And we expect this to be a reasonable run rate going forward.

For 2016, Murphy is planning 2016 capital expenditures for operations to be $825.0 million with approximately 41 percent will be allocated toward the Eagle Ford Shale. This $340 million will be targeted primarily for drilling and completions in the Eagle Ford. The company also announced plans to drill a second Austin Chalk well in the first quarter of 2016.

“We have a lot of flexibility in the Eagle Ford. And we can go down $100 million there if we want to. And that’s the beauty of these plays is you can slow it down. More difficult in offshore.”

— President and CEO, Roger W. Jenkins

Murphy Oil End of Year 2015 Highlights

Produced volumes of 200,753 boepd in the fourth quarter and 207,903 boepd for full-year 2015
Spent $2.19 billion capital in 2015, $0.11 billion below guidance of $2.3 billion
Recorded total proved reserve replacement of 123 percent in 2015, including 10 percent Malaysian sell-down in first quarter 2015
Achieved first production at Dalmatian South #2 in the Gulf of Mexico
Delivered 136 Eagle Ford Shale wells during 2015, with 648 operated wells at year-end
Reduced lease operating expense per barrel by over 18 percent year-over-year
Lowered G&A expense by approximately 16 percent year-over-year

Eagle Ford Rig Count Remains Steady

January 30, 2016 Elizabeth Alford

The Eagle Ford Shale rig count remained flat this week with 74 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, Juan Martin Bernal of Eagle Pass was sentenced to 21 months in federal prison for his role in stealing $1.4 million in Eagle Ford Shale oil. Bernal was one of three defendants who pleaded guilty to one count of theft from an interstate shipment.

A total of 619 oil and gas rigs were running across the United States this week. 121 were targeting natural gas (six less than the previous week) and 498 were targeting oil in the U.S. (12 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)281 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table below.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford are at two this week as natural gas prices climbed, trading at $2.30/mmbtu, a $.16 increase from the previous week.

The Eagle Ford oil rig stayed at 71 with WTI oil prices ending the week at $35.99, an increase of $3.81. A total of 68 rigs are drilling horizontal wells, zero are drilling directional wells, and six are vertical rigs. Karnes County leads the region in development with 18 rigs this week. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Eagle Ford Production Up Slightly

Oilfield Waste is Still Big Business

Abraxas’ Leadership Team Cuts Pay

Eagle Ford Oil Thief Behind Bars

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

Eagle Ford Production Up Slightly

January 28, 2016 Elizabeth Alford

Oil volumes coming out of the Eagle Ford increased slightly in December, as producers remain engaged in a 'survival of the fittest' struggle.

Analyst group, Platts Bentek, reported this week that oil production in the Eagle Ford went relatively unchanged in December. Though the slight increase of 11,000 barrels a day is statistically irrelevant, it is a welcome relief after months of decline.

December's average oil production from the Eagle Ford was 1.5 million barrels per day, a 7% decrease year-over-year from 2014.

“The small increase in crude production in the Eagle Ford shale is attributed to a slight resurgence in drilling activity in the region. In December, the number of active rigs in the Eagle Ford reached 80, an increase of five rigs over the previous month. The brief rebound of active rigs is likely due to producers balancing their drilling programs and budgets for the fourth quarter and meeting their goals for wells drilled for the year.”

— Analyst Sami Yahya

Looking to the future, the U.S. Energy Information Administration (EIA) predicted that volumes from the seven major shale regions in the U.S. will drop by 116,000 barrels a day in February with the Eagle Ford having the biggest losses, possibly dropping 72,000 barrels a day to 1.15 million.

Producers in the region are feeling the pinch as more and more struggle to stay afloat amidst this unstable environment.

“It is survival of the fittest: the best and most efficient rigs and crews remain standing on the field.”

— Analyst Sami Yahya